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General Dynamics reviews options after Army denies bidding process protest

Sterling Heights-based General Dynamics Land Systems is reviewing its options this week after the U.S. Army Materiel Command denied the company’s protest over a bidding process that the company claims favors rival BAE Systems Inc.

The defense contractor, which employs about 1,600 at its headquarters and other locations in Macomb County, could let the Army’s new decision on the Armored Multi-Purpose Vehicle program stand, appeal it to the U.S. Government Accountability Office or file a lawsuit.

The U.S. Army Tacom Life Cycle Management Command in Warren is taking bids on the AMPV through May 28 on its November bid solicitation. General Dynamics filed a protest in February before any companies had submitted bids to build the new vehicle fleet, arguing that details of the bidder request give BAE an unfair advantage.

Army Materiel Command counsel Brian Toland “found in the Army’s favor, determining that the solicitation … (in Warren) provided adequate information and time for contractors to develop proposals and that the solicitation requirements did not unfairly favor any competitor,” the Army said in a statement on the protest decision.

Both General Dynamics and BAE Systems, which houses its Heavy Brigade Combat Team business in Sterling Heights, are preparing local bids to roll out a replacement vehicle by the early 2020s for the Army’s massive and aging fleet of M113 tracked personnel vehicles.

The M113, built by BAE and discontinued in 2007, first entered production in the 1960s.

The protest turns largely on the Army’s decision to offer some of its fleet of Bradley armored fighting vehicles, also built by BAE, and M113s as “exchange” vehicles to help any contractor engineer the new vehicle design.

A copy of the decision late Friday, obtained by the online defense industry trade publication Breaking Defense, indicates General Dynamics’ arguments that the process favors a bidder with extensive knowledge of those vehicles is “speculation and not supported by actual facts.” It also notes that bidders are not required to use the BAE legacy exchange vehicles when preparing their bids.

The vehicle contract could be worth at least $5 billion to replace more than 2,900 M113s for the Army’s primary armored force and possibly around $12 billion if the Army replaces every such vehicle in service, local industry executives told Crain’s.

“We believe the AMPV solicitation provides a competitive advantage to another company, the manufacturer of the M113 vehicles,” General Dynamics said in a statement on the decision over the weekend. “This company has years of Army test and performance data and an Army-acknowledged 18-month lead on the market. In our view, the AMPV procurement process is not consistent with the Competition in Contracting Act of 1984 … (and General Dynamics Land Systems) asked the Army many times to have a dialogue about our concerns.”

In a statement obtained by Crain’s today, BAE said that the AMPV solicitation was two years in coming and that the company is pleased with the Army’s decision.

“Cost savings, political expediency and business reasons do not justify putting soldiers’ lives at risk,” the BAE statement said. “The Army has had this solicitation in the works for two years and has adjusted requirements based on industry feedback to accommodate the broadest number of competitive offerings possible.”

Other prime contractors that have attended past defense industry day conferences by the Army on the AMPV include Navistar Defense, Lockheed Martin Corp., Raytheon Co. and Oshkosh Defense.